The Taoiseach today insisted the Government was not above the law and could not evict Aer Lingus from a hangar in Dublin Airport over demands from rival Ryanair.

Amid rowdy scenes in the Dail, Brian Cowen said he couldn't tear up a legal agreement with one airline to make way for another.

Talks between the boss of the no-frills carrier Michael O'Leary and Tanaiste Mary Coughlan broke down over securing Hangar 6 at the hub - currently leased to Aer Lingus - as a maintenance base with 300 jobs.

Opposition parties hit out at the Government, accusing them of not caring about jobs and doing nothing to keep people in work.

Fine Gael leader Enda Kenny sparked the Dail row, claiming Mr Cowen had to prove he was Taoiseach, intervene in the negotiations and strike a deal.

"If you believe that Michael O'Leary is bluffing here, then call his bluff and write the contract that says if he doesn't do what he says he'll do, he'll hand it back to the leasee, which in this case will be the IDA," the Mayo TD said.

"It's not too late yet, Taoiseach. These jobs have not gone across the sea.

"If you are supposed to be in charge, then get out of your seat in Government offices and prove it. Invite Mr O'Leary in today, personally intervene as you did with the banks, as you wrote a cheque on behalf of the people for €54bn, for Nama.

"Intervene here and secure these jobs for Dublin and Meath and prove yourself to be the Taoiseach. When I get the chance, when I'm over there, I'll intervene."

Labour leader Eamon Gilmore accused the Government of wasting money on projects like e-voting machines, sparking angry shouts from arts minister Martin Cullen, who was behind the now-scrapped system.

"We have a Government in office that doesn't care about jobs," Mr Gilmore said.

"That doesn't care about the people who are losing the jobs and hasn't lifted their little finger to protect jobs of anybody in any of these businesses.

"They've had 12 years in Government wasting money, that's the reason that this country is in the mess that they're in.

"They're incompetent and they're not capable of getting us out of it."

Mr O'Leary refuses to deal with the Dublin Airport Authority and maintains hundreds of jobs can only be kept in Ireland if the Tanaiste intervenes and acts as intermediary.

He claims Hangar 6, formerly used by SR Technics, is the only suitable site and he wants Aer Lingus moved elsewhere.

More than 1,000 skilled engineering jobs were lost when SR Technics closed last April.

Mr O'Leary has claimed the enterprise minister ignored his aim to create 500 posts at the facility and instead relocated 200 of those jobs to Scotland last week.

Mr Cowen said there were two other hangars available to Ryanair and if they weren't suitable another one could be built.

"If 6,000 sq metres is required in Prestwick to do half the jobs, as is the situation, is it not too much to assume that something similar would do for the rest here, the remainder of the jobs?" Mr Cowen asked.

The budget airline claimed it had seen a copy of the lease and there were no restrictions on breaking the rental agreement.

"There is no legal impediment as suggested in the Dail this morning," a Ryanair spokesman said.

"Sadly it appears that this Government is more concerned about protecting Aer Lingus' occupation of an empty hanger than they are about creating 300 new jobs."